The Reserve Bank of India (RBI) on Wednesday acknowledged that the global economic environment remains challenging, citing renewed geopolitical tensions in West Asia, heightened volatility in international financial markets and the downside risks posed by a possible El Nino as key risks to India’s growth outlook.
Despite these external headwinds, RBI Governor Sanjay Malhotra said the Indian economy has remained resilient, with domestic economic activity performing better than expected during the April-June quarter of FY27.
The MPC upgraded its GDP forecast for FY27 to 6.7 per cent, noting that risks remain evenly divided.
At the same time, the central bank revised its consumer price inflation (CPI) forecast downward to 5 per cent for FY27 from 5.1 per cent projected earlier, indicating an improved inflation outlook even as policymakers continue to monitor risks arising from elevated energy prices and global developments.
Governor Malhotra also highlighted that the services sector continues to display healthy momentum, which is expected to lend support to urban consumption and overall domestic demand in the coming quarters.
While upgrading the growth outlook and lowering its inflation forecast, the RBI reiterated that it remains watchful of evolving global and weather-related risks that could influence the domestic macroeconomic landscape in the months ahead.
The revised growth projections are:
Q1 FY27: 7 per cent (Earlier: 6.6 per cent)
Q2 FY27: 6.4 per cent (Earlier: 6.3 per cent)
Q3 FY27: 6.5 per cent (Earlier: 6.5 per cent)
Q4 FY27: 6.8 per cent (Earlier: 6.8 per cent)
